The U.S. Department of Justice's Antitrust Division has mandated that Keysight Technologies Inc. divest certain assets from Spirent Communications plc. to proceed with their proposed $1.5 billion merger. The decision aims to address antitrust concerns linked to the merger.
A civil antitrust lawsuit was filed by the Antitrust Division in the U.S. District Court for the District of Columbia to halt the transaction, alongside a proposed settlement designed to alleviate competitive worries if approved by the court.
"This structural solution preserves competition for key testing equipment used to ensure that data moves quickly and securely across the world," stated Assistant Attorney General Abigail Slater of the Antitrust Division. "The proposed divestiture to Viavi, an established and innovative test and measurement company, ensures that American consumers and businesses will continue to benefit from competition that promotes innovation, and which allows American companies to maintain global leadership."
The complaint outlines how Keysight and Spirent are dominant players in high-speed ethernet testing, network security testing, and RF channel emulators within the United States market. These products are crucial for various tech companies including chipset manufacturers, cloud computing providers, mobile network operators, government labs, and large enterprises. Together, they hold significant market shares: 85% in high-speed ethernet testing, over 60% in network security testing, and more than 50% in RF channel emulators.
Without divesting these assets as proposed, there is concern that Keysight's acquisition of Spirent could lead to increased prices and reduced quality for customers due to decreased competition.
The settlement necessitates Keysight divesting Spirent’s businesses related to high-speed ethernet testing, network security testing, and RF channel emulation specifically to Viavi Solutions Inc., along with all associated tangible and intangible assets required for production and sales of these products. These business lines represent approximately 40% of Spirent’s revenue.
Keysight Technologies is based in Santa Rosa, California with a broad portfolio spanning commercial communications; aerospace; defense; government sectors; and electronic industries with reported global revenues of $4.97 billion in 2024.
Spirent Communications operates globally from Crawley, England offering solutions focused on networks' automated test assurance along with cybersecurity measures having achieved revenues amounting to $460.2 million last year.
